* World Bank's Zoellick says takeover "wrong thing to do"
* Europe, Washington have criticized Argentine takeover bid
* Zoellick says decision will hurt investment in Argentina
By Lesley Wroughton
WASHINGTON, April 19 World Bank President Robert
Zoellick on Thursday called Argentina's move to seize control of
the country's biggest energy company from Spain's Repsol "a
mistake," joining a chorus of international criticism.
President Cristina Fernandez unveiled plans on Monday to
seize a 51 percent controlling stake in YPF by
expropriating almost all of Repsol's shares in the firm.
"It's a mistake," Zoellick, the outgoing president of the
World Bank, told a news conference at the opening of World Bank
and International Monetary Fund meetings of finance chiefs in
"I think it is a symptom we have to watch out for under
economic pressure whether countries will move, ... respond more
to populism, respond more to protectionism," he said. "I think
it was the wrong thing to do."
Argentina's aggressive move has already drawn condemnation
from Madrid to Washington and warnings that investors could shun
Latin America's No. 3 economy.
Argentine Economy Minister Hernan Lorenzino will attend the
weekend meetings in Washington to explain Argentina's position,
which has been supported by some of the country's left-leaning
allies including Venezuelan President Hugo Chavez.
Spain has threatened to retaliate and has asked the European
Union to intervene on behalf of Madrid.
Zoellick said the decision would have a lasting impact on
Argentina's economy and its ability to attract new investments.
"I think it was a bad policy. I think it's a mistake, and I
think it will hurt Argentina over the long run," he told CNN.
"It may have some short-term political benefit to the
government, but this is not the time to be playing with fire,
and ultimately, it will leave Argentina behind in the
international economy, and that hurts the people of Argentina,
and that is who I am concerned about," he added.
YPF has been under pressure from Fernandez's government to
boost production, and its share price has plunged over months of
speculation about a state takeover.
Until recently, YPF had a harmonious relationship with
Fernandez. However, a surge in the country's fuel import bill
has pushed a widening energy shortfall to the top of her agenda
at a time of worsening state finances.